April 7th, 2007
The Week Ahead (7 April 2007)
The Economic Calendar looks pretty dull next week, with only Friday’s PPI report likely to get us excited. Look for our usual industry pricing power report.
Looking less dull is the earnings calendar, as earnings season officially begins.
- Research in Motion (RIMM) reports on Tuesday. Consensus is calling for $0.99 EPS on $933 million in sales, and guidance of $1.04 on $994 million for next quarter. We’re taking the under.
- Genentech (DNA - Annual Report also reports on Tuesday. Consensus wants $0.67 EPS on $2.75 billion in sales and guidance of $0.71 on $2.9 billion for next quarter.
- Lam Research (LRCX) reports on Thursday. Consensus expects this quarter and next to bring in about $1.06 on $645 million in sales. We are expecting order flow to disappoint.
- Infosys (INFY) reports on Friday. Consensus wants $0.40 on $865 million in revenues, and guidance for $0.40 on $920 million. They will make the numbers, but investors will listen closely to the update on visas and employee retention.
William Trent currently owns put options against the shares of Lam Research (LRCX).
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[…] Ignoring the fact that the SEC investigation may require the company to adjust the numbers down again, all of those metrics were more or less in line with the published expectations of Wall Street’s finest. However, companies trading at a trailing P/E multiple of 60, as Research in Motion is was, are generally held to higher expectations. Meeting the published estimates is not enough - they have to be beaten, and preferably by a wide margin. As we noted on Saturday with our earnings preview, “Research in Motion (RIMM) reports on [Wednesday]. Consensus is calling for $0.99 EPS on $933 million in sales, and guidance of $1.04 on $994 million for next quarter. We’re taking the under.” As to that guidance: Revenue for the first quarter of fiscal 2008 ending June 2, 2007 is expected to be in the range of $1.025 billion-$1.075 billion. Subscriber account additions in the first quarter are expected to be approximately in the range of 1.125-1.15 million. GAAP earnings per share for the first quarter are expected to be in the range of $0.99-$1.07 per share diluted. […]
[…] 72,241 employees as on March 31, 2007 for Infosys and its subsidiaries In our earnings preview we said “They will make the numbers, but investors will listen closely to the update on visas and employee retention.” Doing the math, 3,182 employees left the company (the difference between net and gross.) That number is 5.2% of the number of employees at the beginning of the quarter, which we figure to be an annualized attrition rate along the lines of 20%, in line with the rates that have concerned us for some time. However, instead of the more than 10,000 new hires in the July-September quarter last year (which admittedly may have been boosted by graduation timing) there were less than 6,000 this quarter. As a result, the total number of employees grew just 4% sequentially - perhaps a 16% annualized rate. […]